Biden order gives federal raises that fail to match inflation rate

December 28, 2022

President Joe Biden on Friday signed an executive order giving 4.6% raises to federal employees pay raises, while the inflation rate over the last 12 months was 7.1% and food prices have gone up 12% during that time.

The raise is for "General Schedule" employees, which include most civilian federal workers, and will take effect on the first payday after January 1, 2023.

It is a bigger increase than the 2.7% federal employees got last year, but still fails to match the inflation rate.

Planned since August

Biden had promised the increase in August by sending letters to House Speaker Nancy Pelosi (D-CA) and Vice President Kamala Harris announcing his intentions.

“Title 5, United States Code, authorizes me to implement alternative plans for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems if, because of “national emergency or serious economic conditions affecting the general welfare,’ I view the increases that would otherwise take effect as inappropriate,” the letter said. “Accordingly, I have determined that it is appropriate to exercise my authority to set alternative pay adjustments for 2023.”

Congress did not address pay increases in its recent omnibus spending package, which signaled tacit approval for Biden's previously announced plan to handle them by executive order.

It is an appropriate use of the executive order, unlike many of the ways Biden has used that power during his presidency.

A balanced approach

While the raises fail to keep up with inflation, they are closer to the Personal Consumption Expenditure Index, which shows how much people's actual spending has increased. That number was 5.5% over the previous 12 months.

While the idea was to help federal workers keep up with cost increases, Biden had to balance that with the reality that taxpayers who may not have gotten raises themselves would have to pay for the increases, or they would be added on to the national debt, which stands at over $31 trillion and grows by the day.

Even just the current debt is equivalent to $94, 305 per U.S. citizen and over $248,500 per taxpayer. That's several years' salary for the average worker.

Wages for workers overall have increased 5.1% as of September 2022, looking at the previous 12 months, so the pay increase for federal workers doesn't even match average pay increases.

A downward trend

While the perception has been that government workers are better paid than their private sector counterparts, federal wages have actually not kept pace with private ones. Federal workers now make around 22% less than private sector ones, according to the website Government Executive.

This trend may be fueling high rates of turnover among top federal officials like cabinet positions, with many leaving after a year or two for higher-paying private sector jobs.

Biden would surely have been criticized for giving federal raises that did match the rate of inflation and expecting taxpayers to pay for them, so in this case he probably did the best he could.

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Thomas Jefferson
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